The concept of diversification is critical to the overall investment policy. As stated before, one of the tenets of the investment methodology is using ETFs that track broad based indexes rather than portfolios with small sector focus (attempting to minimize overlap between funds while maximizing diversification)

Another way to maximize diversification is to reduce overlap. Overlap occurs where an account owns several mutual funds or ETFs that each hold positions in some of the same securities. Fund overlap can reduce the benefits of diversification in a portfolio.